Global food company Nestle (OTC:NSRGY) has had to deal with changing consumer trends that have threatened its ability to sustain long-term growth. Yet having identified that potential obstacle, Nestle has worked hard to come up with a turnaround strategy to reinvigorate its core business while adapting to changing conditions.

Nestle recently released its third-quarter financial report, which concentrates largely on how well the company has done in promoting sales of its key products. Yet there was a lot more information in Nestle's news release, including some exciting news that will put more money in shareholders' pockets over the next three years.

Solid performance for Nestle

Nestle's sales figures for the first nine months of the 2019 fiscal year were generally favorable. Total reported sales climbed 2.9% to 68.4 billion Swiss francs. Organic growth was even stronger, coming in at 3.7%. Of that, about 0.7 percentage points came from Nestle's pricing power, with the remaining 3 percentage points stemming from real internal growth. Net acquisitions added 0.7 percentage points to Nestle's overall growth rate, but adverse currency impacts reduced reported sales by 1.5 percentage points.

Geographically, Nestle got most of its sales bump from the Americas segment. There, reported sales jumped 9.5%, with 5.5 percentage points of that number coming from merger and acquisition activity. However, even taking that into account, organic growth exceeded 4%. Nestle pointed to extremely strong performance for the Purina pet food and products segment as bolstering performance, and the launch of Starbucks (NASDAQ:SBUX) branded creamer to complement its coffee offerings helped generate excitement as well.

Several Nestle-distributed Starbucks products, including coffee in bags and cups.

Image source: Nestle.

However, the rest of the world wasn't as kind to Nestle. Sales were down in greater Europe and in the company's waters and other business segments. Nestle managed to produce a modest 0.9% gain in sales in the Asia and Oceania segment, but even there, foreign exchange impacts hurt the company's overall top-line numbers. Pricing pressure also hurt Nestle's performance in key areas like Europe and Japan.

Also alarming was a slowdown in growth in China. Nestle reported flat real internal growth and pricing for the period, representing a troubling decline in the pace of business in the world's second-largest economy.

What's next for Nestle?

CEO Mark Schneider made simple comments about Nestle's work. "We are pleased with our nine-month results," Schneider said, "and have made further progress toward our 2020 financial goals." The CEO pointed to the sale of its Nestle Skin Health division as part of the company's broader portfolio transformation to emphasize its most promising businesses. The food giant also said that it would split up its water business and integrate it into its three geographical zones as of the beginning of 2020, essentially ending separate reporting of the business while retaining a strategic business unit to concentrate on the product internally.

Nestle is optimistic about its future. The company confirmed that it still expects to have organic sales growth for the full year at about 3.5%, and it anticipates being able to sustain operating margin at or above 17.5%. After adjusting for currency impacts, Nestle still believes that earnings per share will rise from year-earlier levels.

Yet what shareholders might well find most rewarding is that Nestle announced plans to make massive distributions of capital back to its investors. Between 2020 and 2022, Nestle's board agreed to distribute as much as 20 billion Swiss francs to shareholders. The food giant will keep paying regular dividends, but it also anticipates doing stock buybacks as well as paying out special dividends as occasions warrant.

Nestle shareholders didn't immediately reward the company, with shares steadily losing ground following the announcement. Yet there's a lot of reason for long-term optimism at Nestle, and the food company looks to be on a path toward better performance in the years to come.